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This study investigates the effect of resource rent on infrastructural development in Africa and
how governance institutions moderate this relationship. The pooled OLS and the dynamic system
GMM estimation techniques are adopted with a panel of 52 African economies over the period
2005–2022. We find that resource rent significantly hampers infrastructural development inAfrica,
thereby reflecting the prevalence of the “natural resource curse” phenomenon. We also find that
the unconditional effects of governance institutions are mainly negative and significant, which
aptly reflects the presence of weak institutions in Africa. Interestingly, our results also show that
low institutional quality in the region intensifies the adverse effect of resource rent, while a higher
level of institutional quality in the region moderates the adverse effect of resource rent. These
findings remain consistent with components of resource rent, such as forest rent, oil rent and
coal rent. Consequently, we emphasize the policy implications of these findings, which mainly
underscore the need for policymakers and leaders in Africa to embrace institutional reforms that
will ensure transparent resource management, increased infrastructural investment and sustainable
infrastructural development on the continent.
